Correlation Between Global X and Dell Technologies

Can any of the company-specific risk be diversified away by investing in both Global X and Dell Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Global X and Dell Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global X Funds and Dell Technologies, you can compare the effects of market volatilities on Global X and Dell Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Global X with a short position of Dell Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Dell Technologies.

Diversification Opportunities for Global X and Dell Technologies

-0.21

Correlation Coefficient

Global X  Dell Technologies

Very good diversification

The 3 months correlation between Global and Dell is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Dell Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dell Technologies and Global X is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Global X Funds are associated (or correlated) with Dell Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dell Technologies has no effect on the direction of Global X i.e., Global X and Dell Technologies go up and down completely randomly.

Pair Corralation between Global X and Dell Technologies

Considering the 90-day investment horizon Global X is expected to generate 2.53 times less return on investment than Dell Technologies. But when comparing it to its historical volatility, Global X Funds is 3.2 times less risky than Dell Technologies. It trades about 0.05 of its potential returns per unit of risk. Dell Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  11,390  in Dell Technologies on September 13, 2024 and sell it today you would earn a total of  479.00  from holding Dell Technologies or generate 4.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Global X Funds  vs.  Dell Technologies

Global X Funds

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Global X is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Dell Technologies

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dell Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Dell Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Global X and Dell Technologies

The main advantage of trading using opposite Global X and Dell Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Dell Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dell Technologies will offset losses from the drop in Dell Technologies' long position.

The idea behind Global X Funds and Dell Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.